POET Tech Plummets 47% on Cancelled Order as Domino's Dips, Defying Broader Market Stability

The AI Rally Faces a Reckoning

The seemingly unstoppable momentum behind artificial intelligence is being challenged on multiple fronts, from leadership turmoil and slowing growth at key players to the unsustainable economics of the technology itself.

OpenAI's Internal Strains Rattle Markets

Confidence in the AI sector took a significant hit following reports that OpenAI missed key targets for revenue and new users. The news, coupled with board directors questioning the firm's enormous spending on data centres, sent shockwaves through its ecosystem.

• Investor Fallout: Shares in Japanese tech giant SoftBank, which holds an 11% stake in OpenAI, tumbled 10%. The negative sentiment also impacted key partners in OpenAI's orbit, with Oracle and even market leader Nvidia seeing their shares fall in pre-market trading.
• Partnership Shifts: In a related move, OpenAI has ended its exclusive cloud computing partnership with Microsoft. This allows OpenAI to work with rivals like Google Cloud and Amazon Web Services, potentially to find better terms or diversify its infrastructure, but it also signals a major shift in the relationship that powered its initial growth.

The Soaring Cost of AI

A painful irony is emerging in the tech sector's pivot to AI. In the first quarter of 2026, tech companies slashed 81,700 jobs to free up cash for AI investment. However, many are now discovering that the cost of computing power required to run AI models is matching, or even exceeding, the salary costs they eliminated. This expensive trade-off is leading Wall Street to question the efficiency of this strategy, turning a perceived cost-saving measure into a potentially massive miscalculation.

The Global AI Talent and Tech War

The battle for AI supremacy has moved beyond hardware to controlling intellectual property and talent. Regulators are stepping in, creating new hurdles for cross-border deals.

• Meta's Blocked Deal: Chinese regulators blocked Meta's planned $2 billion acquisition of AI startup Manus, citing new rules designed to protect domestic technology. The move signals an intensifying effort by Beijing to prevent its top AI talent and firms from being acquired by US rivals.
• EU Targets Google's AI Advantage: The European Commission has published draft rules that would force Google to open up its Android mobile system, giving rival AI assistants like OpenAI's ChatGPT the same deep-level access its own Gemini assistant enjoys. If passed, this would significantly weaken Google's distribution advantage and benefit competitors, with fines for non-compliance reaching up to 10% of global revenue.
• Musk vs. Altman: Adding to the sector's uncertainty, Elon Musk's high-profile lawsuit against OpenAI and its CEO Sam Altman has officially begun, with a nine-person jury now seated. Musk alleges the company betrayed its original non-profit mission, creating further instability around the industry's most visible firm as opening arguments commence.

Economic & Geopolitical Front

The broader economy is navigating a complex landscape of geopolitical risk in the energy markets and growing signs of stress among consumers, particularly in the car market.

UAE Quits OPEC, Shaking Up the Cartel

In a stunning move, the United Arab Emirates announced it will leave OPEC on May 1st, ending nearly 60 years of membership. The decision lands a day before the group's key meeting in Vienna and represents the most serious blow to the cartel's stability since Qatar left in 2019. The UAE has long wanted to use its significant spare production capacity, something OPEC quotas prevented. While this could eventually lead to more supply and lower prices, the immediate effect is chaos, removing a key Saudi ally from the bloc at a time of extreme regional tension.

Oil Prices, Iran Tensions, and the Flight to Safety

Brent crude oil futures have surged above $111 a barrel as the market watches for a US response to an Iranian proposal to de-escalate tensions in the Strait of Hormuz. Crucially, the peace offer, sent via mediators, failed to lower prices, signalling that traders believe the disruption will last. Goldman Sachs has warned that a worst-case scenario could push Brent crude to $120 a barrel.

This volatility is pushing major energy firms to seek stability. In a landmark deal, British oil giant Shell announced a $16 billion acquisition of Canadian shale producer ARC Resources. The move signals a strategic pivot towards assets in lower-risk countries like Canada, as producers look to insulate themselves from Middle Eastern instability.

Hormuz Blockade Hits Global Fertiliser Supply

The fallout from the Strait of Hormuz blockade is now spreading from energy to food. With around 35% of the world's sea-traded urea—a key fertiliser—stuck in the Gulf, prices are rocketing. India, a top importer, recently paid nearly double its usual price. This is a direct leading indicator for future food price inflation. US producers are benefiting, with shares in CF Industries, the largest US nitrogen producer, up 76% this year as it operates far from the disruption.

Big Oil Quietly Returns to Venezuela

While the Middle East is mired in conflict, oilfield service companies are pulling drilling rigs out of long-term storage in Venezuela, a clear sign that capital is returning to the country after years of sanctions. With the world's largest crude reserves, Venezuela's gradual return to the market offers a potential long-term source of new supply.

The Consumer Car Loan Crisis

A serious hangover from the pandemic-era car buying frenzy is now evident. Roughly 30% of people trading in their vehicles in the first quarter of 2026 were 'underwater' on their loans, owing an average of £5,700 ($7,200) more than their cars were worth. This 'negative equity' is forcing buyers to roll old debt into new, longer-term loans—with over 42% of underwater borrowers opting for 84-month (seven-year) terms. This trend is pushing car loan defaults to their highest level since 2010, a clear indicator of consumer strain.

A Silver Lining in Used Electric Vehicles

In stark contrast to the debt-laden traditional car market, the electric vehicle (EV) sector is presenting a unique buying opportunity. A wave of leased EVs is returning to dealerships, creating a supply glut. These two and three-year-old vehicles are returning at just 45% of their original value, far below the expected 60%. For consumers, this means heavily discounted prices. For example, a Volkswagen ID.4 that cost £41,000 ($52,000) new in 2023 can now be found for under £18,200 ($23,000), potentially accelerating EV adoption among price-sensitive buyers.

Central Banks and Economic Outlook

Central bank policies are diverging sharply. While the US Federal Reserve, Bank of England, and European Central Bank are expected to hold rates steady, the Bank of Japan has shown its hand. It kept its main rate at 0.75%, but a hawkish 6-3 vote split revealed three members wanted an immediate hike to 1%. This puts its June 16th meeting firmly in play for a rate rise, especially after the Bank sharply increased its 2026 inflation forecast to 2.8% while cutting its growth forecast in half. Meanwhile, billionaire investor Ray Dalio recently stated the US is in a 'stagflationary' environment—a toxic mix of low growth and high inflation—and recommended against interest rate cuts, complicating the outlook for western central banks.

Major Company Movers

Beneath the relatively flat index movements, several companies experienced dramatic shifts based on earnings, corporate actions, and strategic pivots.

Stumbles and Setbacks

• Domino’s Pizza (DPZ): Shares fell almost 9% after reporting weak Q1 domestic same-store sales growth of just 0.9%, far below Wall Street's expectations. In response, Domino's plans new deals and a $1 billion share buyback programme to support its stock price.
• POET Technologies (POET): The specialty chip maker's shares plummeted by a staggering 47%. The collapse was triggered after its main client, Marvell, cancelled all orders, accusing POET of breaching a confidentiality agreement. This highlights the severe risk of having too much revenue tied to a single customer.
• On Holdings (ONON): The popular performance shoe brand saw its stock fall 23.5% year-to-date. The company is attempting a risky pivot towards 'mass luxury' with celebrity endorsements, a strategy that has backfired for other brands and is worrying investors.
• Spotify (SPOT): Shares in the streaming giant tumbled over 10% despite its revenue meeting expectations. Weaker-than-expected guidance on operating income for the current quarter spooked investors, overshadowing a new partnership with Peloton to add fitness classes to its platform.

Winners and Surprises

• Nvidia (NVDA): In a major milestone, the AI chip giant became the first company to reach a $5 trillion market valuation, cementing its leadership position.
• Meta Platforms (META): Tackling the immense energy demands of AI, Meta has signed a deal with startup Overview Energy to source power from space-based solar panels, aiming for near-24/7 clean power for its data centres.
• General Motors (GM): The carmaker's shares rose roughly 5% after it increased its 2026 profit guidance, citing an expected $500 million tariff refund. The company also beat first-quarter earnings expectations.

Real Estate Sector Consolidation

Consolidation continues to reshape the property industry. Cloud-based firm The Real Brokerage is set to acquire RE/MAX in an $880 million deal, creating a network of over 180,000 agents. This follows a similar large buyout seven months ago, indicating a trend toward fewer, larger players in the sector.

The rental market is also showing clear signs of cooling. Nearly 40% of UK rental listings are now offering concessions like a free month's rent. Annual rent growth has slowed to just 1.8%, its weakest pace since 2020, giving tenants more bargaining power.

Crypto & International Developments

The world of digital assets is maturing, with major financial institutions making serious moves while the decentralised ecosystem continues to grapple with security and governance.

Crypto Market Shows Signs of Strength

With Bitcoin currently trading around $76,000, analysts see its recent dip to $60,000 as a floor, viewing the market as fundamentally stronger. They point to steady institutional inflows and corporate buying as key drivers for what could be a structurally longer bull market. Further bolstering this view, the total supply of stablecoins—digital tokens pegged to currencies like the US dollar—has hit an all-time high of over $316 billion, driven increasingly by real-world financial uses.

Wall Street Wades Deeper into Digital Assets

In a clear signal of institutional adoption, Morgan Stanley has launched a new money market fund specifically to manage reserves for stablecoin issuers. The fund positions the banking giant to compete directly with BlackRock, which currently dominates this space. With the stablecoin market projected to grow to $2 trillion by 2028, managing these reserves represents a massive and growing fee opportunity for traditional finance.

AI Transforms Trading and Finance

Gemini has launched what it calls the first 'agentic' trading system on a regulated US exchange, allowing users to connect AI models like ChatGPT directly to their trading accounts to execute trades. Separately, fintech firm Revolut has built a powerful AI model trained on 24 billion banking events, dramatically improving its credit scoring and fraud detection.

DeFi Growing Pains: Hacks, Governance and Upgrades

Decentralised finance (DeFi) platforms faced a brutal month, with over $605 million stolen by hackers in April alone. The security breaches have shaken confidence, causing Aave's coin to fall by 20%. Elsewhere, prediction market Polymarket acknowledged its infrastructure has failed to keep pace with growth and announced a complete technical overhaul.

The Rise of High-Risk Trading

A new frontier is opening in crypto derivatives. Prediction markets like Polymarket and Kalshi are reportedly planning to offer 'perpetual futures', often called 'perps'. These are high-risk trading products, largely restricted in the US until recently, that allow for enormous leverage—sometimes up to 100 times the initial investment. Their introduction could redefine how users bet on real-world events.

Global Developments and Scrutiny

• Kuwait's Pipeline Deal Tests Investor Nerve: Bids have closed for a $7 billion stake in Kuwait's oil pipeline network. The deal's success will be a real-time gauge of how global investors view the risk in the region, especially after Kuwait reported 'severe material damage' to some facilities from recent attacks.
• India Overhauls Bank Lending Rules: The Reserve Bank of India has finalised its new 'Expected Credit Loss' framework, which will force banks to set aside money for potential future loan losses, rather than waiting for them to go bad. The move, which aligns India with global standards, will require banks to hold larger cushions against risk starting in April 2027.
• BYD Under Investigation: Chinese electric car maker BYD is under investigation in the European Parliament following allegations of labour abuses at its new factory in Hungary. A watchdog report claims workers were forced into 12-hour shifts, seven days a week, raising serious questions about its operations as it expands into Europe.

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NOTE: This content is for informational and educational purposes only and does not constitute financial advice. Always do your own research. Not financial advice (NFA).